Australian employment figures have defied expectations, surging by 65,200 jobs in December. This follows a decline of 21,300 workers in November. The robust increase has pushed the jobless rate down to 4.1 per cent, a significant drop from the previous 4.3 per cent. Market forecasts, according to Reuters, had anticipated the creation of 30,000 jobs and a rise in the jobless rate to 4.4 per cent.
The strength of the jobs market is a crucial factor influencing inflation, and it has remained remarkably resilient. The Reserve Bank of Australia (RBA) had projected the jobless rate to reach 4.4 per cent by the end of 2025. RBA Governor Michele Bullock previously stated that the board would be closely monitoring the labour report, emphasizing the data’s importance in shaping monetary policy decisions.
Following hotter-than-expected monthly inflation data in November, financial markets had priced in a 30 per cent probability of an interest rate hike when the RBA convenes next month following the summer break. The release of Thursday’s employment figures has caused that probability to jump to 50 per cent. The next key piece of economic data is the December quarter inflation report which will be released next week.
